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Electric Sector Emissions Impacts of the Inflation Reduction Act

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EPA. 2023. Electricity Sector Emissions Impacts of the Inflation Reduction Act: Assessment of projected CO2 emission reductions from changes in electricity generation and use. U.S. Environmental Protection Agency, EPA 430-R-23-004.

  • The Inflation Reduction Act spurs substantial emission reductions from the electric power sector of 49 to 83% below 2005 levels in 2030.
  • Across the end-use sectors, emissions reductions are greater under the Inflation Reduction Act scenario. Buildings exhibits the greatest reductions from 2005 levels of direct plus indirect CO2 emissions from electricity followed by industry and transportation.
  • The Inflation Reduction Act lowers economy-wide CO2 emissions, which includes electricity generation and use, by 35 to 43% below 2005 levels in 2030.
  • The range of reductions across models is wide, which reflects differences across Inflation Reduction Act representation, implementation, model structure, and assumptions.
  • Emission reductions are sensitive to Inflation Reduction Act implementation, deployment constraints, and technology costs — with electric sector emissions reductions of up to 91% below 2005 levels in 2030 under advanced technology assumptions.

The Inflation Reduction Act marks Congress's most significant action on clean energy and climate change in the nation’s history. Section 60107(5) of the Inflation Reduction Act requires the Environmental Protection Agency (EPA) to assess the reductions in greenhouse gas emissions resulting from domestic electricity generation and use changes through 2031.

To satisfy this requirement, EPA has developed a report that relies upon results from state-of-the-art multi-sector and electric sector models to assess how the IRA's provisions reduce emissions. The report examines the projected reductions in CO2 emissions due to the Inflation Reduction Act provisions, including GCAM modeling from the Center for Global Sustainability.

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